Specialist Group

Transcription

Specialist Group

Specialist Group
on Statistics and
Economics
Romanian Water Association
Regional Economic Workshop
Water tariffs and affordability
Water pricing in Chile: Insuring Cost Recovery,
Affordability, and Human Right to Water and
Sanitation
Regional Economic Workshop Water tariffs and affordability
17th May 2016, Parliament Palace Bucharest
Specialist Group
on Statistics and
Economics
Chile
Specialist Group
on Statistics and
Economics
Chile’s Demographic Characteristics
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4,630 km from lat. 18°S to Cape Horn (lat. 56°S)
Approximately 17 million habitants, 89% urban
Population growth rate : 1,13%
Fertility rate: 2,16 per woman
Infant mortality rate : 9.4/1000
Life expectancy : 75.94 years
Population density per km2 : 20
Literacy: 95%
• Per capita income: US $15,730  € 13.830
• Poverty reduction: 38.6% 1990 – 14.4% (2013)
• Highest income inequality of OECD Countries
Specialist
Group
Specialist
Group
on Statistics and
on
Statistics and
Economics
Economics
Romanian
Water Association
Climatic and Hydrologic Characteristics
Specialist
Group
Specialist
Group
on Statistics and
on
Statistics and
Economics
Economics
Romanian
Water Association
Demographic and Productive Spatial Distribution
Specialist Group
on Statistics and
Economics
Urban Water Pricing Regulatory Framework
• Legal Frawork (1988)
• Separated regulatory and supervisory functions from service provider;
• Establishes efficient tariffs so as to allow operators
• To finance operation,
• To finance investment requirements, and
• To obtain a minimum return on their investments;
• Established a subsidy to insure affordability for low-income families.
Specialist Group
on Statistics and
Economics
• New regulatory regime considered concessions to establish, build and
operate water and sanitation services by private providers
• Concession holder is obliged to satisfy
• Water demands
• water quality standards,
• Implement required investment plans so as to meet increasing water demand
ensuring supply continuity and quality of service.
• No water cuts or rationing during the recent 8 year drought
• WSS provider that does not satisfy these requirements under normal conditions,
loses the concession
• No indemnization
Specialist Group
on Statistics and
Economics
• State's Superintendencia de Servicios Sanitarios (SISS) role is to
• Grant WSS concessions;
• Monitor WSS’s compliance of the development plan;
• Set efficient tariffs that ensures full cost recovery; and
• Monitor the continuity and quality of the water and sanitation provision
service.
Specialist Group
on Statistics and
Economics
Tariff Setting model
Objectives
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Economic efficiency
Water conservation incentives
Equity
Affordability
Policy makers face the challenge of setting water tariffs
which deal with multiple objectives.
Specialist Group
on Statistics and
Economics
Tariff Setting in Chile
Two Part Tariff (Coase Solution)
• Fixed charge ($) function of metering costs and water
conection diameter
• Variable charge ($/m3) satisfies efficiency criteria
• Non Peak Variable charge
• Operation and Distribution Costs
• Peak Variable charge
• Operation Costs
Specialist Group
on Statistics and
Economics
Efficient Model Firm
Firm that starts from zero
Uses the necessary assets
To offer water and sanitation service
With an investment plan
Specialist Group
on Statistics and
Economics
𝜏=
𝐴𝐼+𝑂𝐶+𝑀𝑅+𝑇
𝐶
𝐴𝐼: annualized value of the required investments.
𝑂𝐶: annual operating and maintenance costs.
𝑀𝑅: minimum guaranteed returns (only over WSS investments)
𝑇: taxes
𝐶: total annual projected water consumption for the next 5 years in the
concession area.
AI considers water’s scarcity value
• Market WR value
Specialist Group
on Statistics and
Economics
Tariffs 2014
Fixed cost = US$ 1,9 = € 1,5
Variable Tariff = US$ 1,3 = € 0,83
Peak Tariff = US$2,2 = €1,8
Fixed cost = US$ 1,1 = € 0,8
Fixed cost = US$ 1,0 = € 0,8
Specialist Group
on Statistics and
Economics
Equity and Affordability
Affordability criteria:
• Provision of subsidies directly to the most vulnerable households
which are classified based on annual survey.
• Central government transfers the block subsidy to the municipalities.
• The payment share ranges from
• 15% to 85% of the water bill for low income households
• 100% for vulnerable households
• Subsidy covers a consumption of up to 15 m3/month.
Specialist Group
on Statistics and
Economics
Equity and Affordability
Water Consumption and Sanitation Subsidy
• Advantages
• Economic signals are not distorted
• Families recieve bill with total consumption and cost
• More equitable than implicit subsidies in tariffs
• Separates public agency that sets the tariff from the agency that identifies subsidy
recipients
• Disadvantage
• Implementation costs
Specialist Group
on Statistics and
Economics
Chile’s Urban Water and Sanitation sector
Growth and Evolution
SISS (2013)
Specialist Group
on Statistics and
Economics
Average monthly household water consumption
(m3/household/month) (SISS, 2013)
Specialist Group
on Statistics and
Economics
Water Supply Continuity (SISS, 2014)
Specialist Group
on Statistics and
Economics
Atacama
Aysén
Do tariffs reflect water scarcity?
Water availability: 208 m3/person/year
Population: 254,336 inhabitants (1,67%)
Extension: 75,176 Km2 (9,09%)
Water availability: 2,993,585 m3/person/year
Population: 91,492 inhabitants (0,65%)
Extension: 108,494 Km2 (14.3%)
Specialist Group
on Statistics and
Economics
Do tariffs reflect water scarcity?
Atacama: 35,936 Ch$/ 20 m3 /month (46.07
€/month)
Aysén: 33,243 Ch$/ Ch$/ 20 m3 /month (42.62
€/month)
Evolution of urban water consumption
200
l/person/day
150
Atacama: 130.4 l/person/day
Aysén: 95.3 l/person/day
100
50
0
2000
2002
2004
2006
2008
2010
2012
2014
Year
Atacama
Aysén
Specialist Group
on Statistics and
Economics
Closing Remarks
• Chilean WSS Regulation has provided
• Right economic signals for an efficient allocation of resources.
• Led to
• Improvement in quality of service
• Increase in WSS provision coverage, despite rapidly increasing urban
populations; and
• Increase in water conservation by customers.
Specialist Group
on Statistics and
Economics
Challenges
• Declining water sources due to climate change
• Higher frequency and intensity of droughts
• Identify and invest in new water sources
• Reduce non-revenue water (30% to 40%)
• Increase energy use efficiency
• Timely response to the requirements of increasingly demanding customers
Specialist Group
on Statistics and
Economics
Centro de Derecho y Gestión del Agua

Specialist Group

Transcription

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